Re: Singulatarian in Spite of Myself?

From: Robin Hanson (
Date: Wed Mar 29 2000 - 14:55:07 MST

Peter McCluskey wrote:
>Your observation that few people are interested in the possibility
>of a singularity provides a reason for expecting that investors are
>too pessimistic about growth rates, and this presumed pessimism
>provides information about how investments are likely to be mispriced.

I grant that it may provide info to someone, though as yet not to me.

>The most obvious implication of pessimism about long-term growth rates
>is that people are likely to underestimate what long-term interest rates
>should be.

I agree, though to take advantage of this you'd need investments that
distinguish real from nominal interest rates. I presume long term
nominal interest rates already factor in the possibility of some
future period of massive inflation. Very fast growth would look like
that, except that it would be real interest rates that explode.
So, what investment is the right bet on a low chance of very
high real interest rates?

> Another possible implication is that investors are underestimating the
>industries that would drive the increase in growth rates. If it is
>possible to guess what those industries will be, ...

Yes, but the big question is: can we?

Robin Hanson
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030
703-993-2326 FAX: 703-993-2323

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